Tobacco; Light one up like a man!

The title above implies the basic charm behind using tobacco products, mostly cigarettes. Media ads for tobacco would target their prospective buyers with images of cowboys riding in the wild and lighting up a cigarette while performing manly tasks such as rounding up a herd of cows or horses, others would allude to class, as in, only classy gentlemen and ladies prefer a particular brand.

To be more specific, tobacco giants such as Phillip Morris and British American Tobacco manufacture known brands such as Marlboro, Virginia Slims, Benson & Hedges, and Parliament etc. Included among tobacco products are also others such as tobacco that can be chewed, smoked in a pipe, or more popular nowadays smoked in a traditional Hookah, also referred to as Sheesha.

While traditionally, tobacco may have sold well, in today’s world of health awareness and the dangers of smoking and the dangers of tobacco in general, it is facing a challenge. CVS pharmacies across the US recently stopped sales of all tobacco products. May government health departments across the world have now made it mandatory that a warning label be printed on all tobacco products that ‘smoking is injurious to health.’ What effect has all this had on the stock performance of tobacco companies? Investment analysts are now warning that while tobacco might still be a good investment option, it is better to hold back or invest in other stocks. Remember that market sentiment is a BIG factor when it comes to stock markets and with tobacco being viewed as a negative product, long term outlook for earnings may not be so good after all.